LLIC  INTEHEST  AND  I’lUVATE  MONOPOLY. 


AN  ADDRESS 


DKLIVKltED  HKFOKK 


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THE  BOSTON  BOARD  OF  TRADE, 


OCTOBER  16,  1807. 


JOSIAH  QUINCY. 


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HAVE  TO  SAY  TO  THE  RAILWAY  COMPANIES,  'YOU  SHALL  NOT  HAVE  A 
ANENT  .MONOPOLY  AGAINST  THE  PUBLIC.”'— SiK  Robert  Peel. 


BOSTON: 
1867.  • 


J.  U.  EASTBURN’S  PRESS. 


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PUBLIC  INTEREST  AND  PRIVATE  MONOPOLY. 


AN  ADDRESS 

DELIVERED  BEFORE 


THE  BOSTON  BOARD  OF  TRADE, 

OCTOBER  16,  1867. 

BY 

JOSIAH  QUINCY. 


“WE  HAVE  TO  SAY  TO  THE  RAILWAY  COMPANIES,  ^YOU  SHALL  NOT  HAVE  A 
PERMANENT  MONOPOLY  AGAINST  THE  PUBLIC:"-^in  Robert  Peel. 


BOSTON: 

1867. 

J.  H.  EASTBURN’S  PRESS.  * 


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SPEECH. 


Mr.  President  : 

In  the  month  of  November,  a  year  ago,  I 
submitted  to  the  Board  of  Trade  a  communication  on  the 
Kailroad  System  of  Massachusetts.  Your  attention  was  called 
to  certain  facts  showing  the  immense  waste  of  power,  as  well 
as  the  unnecessary  taxation  of  every  citizen,  Avhich  results  from 
the  present  management  of  our  railroads.  By  the  English 
estimates  it  was  shown  that  it  need  cost  but  one  hundred  and 
fifty-nine  dollars  to  run  a  train  for  two  hundred  miles,  the 
distance  between  Albany  and  Boston,  that  twenty-seven 
passengers  at  the  present  rates  would  pay  this  sum,  thus 
making  it  possible  to  carry  nine  hundred  and  seventy-three 
passengers  for  nothing.  By  these  estimates  it  appeared  that 
two  hundred  tons  of  freight  could  be  carried  two  hundred 
miles  for  one  hundred  and  fifty-nine  dollars,  while  twenty- 
three  tons  at  the  jiresent  rates  would  pay  this  sum,  leaving  one 
hundred  and  seventy-seven  tons  which  might  be  carried  gratu¬ 
itously.  I  showed  you  that  the  interest  of  the  managers  of 
the  Western  Railroad  was  diametrically  opposite  to  the  interest 
of  the  public, — the  interest  of  the  former  being  to  do  a  small 
amount  of  business  at  a  large  price,  that  of  the  latter  that  a 
larsfe  business  should  be  done  at  a  small  one.  It  was  shown 

O 

that  the  Board  of  Directors  of  this  Railroad  was  in  fact  a  close 
Corporation,  able  to  fill  their  own  vacancies,  and  to  keep 
themselves  in  power  forever.  Thus  it  appeared  that  the  State 
of  Massachusetts  and  her  public  spirited  citizens  had  expended 
millions  to  facilitate  intercourse  with  the  W est,  and  then  placed 
their  road  in  the  hands  of  men  whose  interest  it  was  not  to  do 
the  very  thing  intended  by  the  State  and  the  original  subscri¬ 
bers.  In  view  of  these  things,  I  argued  that  the  time  had  come 
for  the  State  to  exercise  the  power  she  had  wisely  reserved, 
and  to  purchase  the  Worcester  and  Western  Railroads  at  a 
price,  which  at  that  time,  would  have  been  about  ^15,355, 272. 

If  I  had  wanted  any  assurance  that  it  was  the  duty  of  a 
disinterested  citizen  to  urge  this  purchase  upon  the  State,  such 
a  conviction  would  have  been  fully  confirmed  by  subsequent 
events.  Let  me  call  your  attention  to  the  extraordinary  action 
of  the  last  Legislature  in  relation  to  the  Western  Railroad. 

Under  a  bill  to  secure  the  union  of  that  road  with  the  Boston 
and  Worcester,  a  grant  was  made  of  about  3, 836, 328  to  the 
favored  Corporation.  The  Legislators  of  thirty  years  ago  knew 
that  the  time  mi^ht  come  when  the  State  must  control  the 

O 

great  thoroughfare  on  which  her  prosperity  would  depend. 
To  secure  this  on  just  and  favorable  terms  to  the  State  they 


Ob 


4 


conditioned  the  loan  of  their  credit  on  an  agreement  by  the 
corporation  that  the  State  should  at  any  time  have  the  right  to 
take  the  road,  on  the  payment  of  such  a  sum  as  would  reim¬ 
burse  the  amount  of  capital  paid  in,  with  a  net  profit  of  seven 
per  cent,  per  annum  from  the  times  of  the  payment  thereof  by 
the  stockholders  to  the  time  of  such  purchase.  There  was  no 
question  concerning  the  right  of  the  State.  The  law  was 
plain,  and  all  who  purchased  the  stock  were  bound  in  law  to 
look  to  the  incumbrances  on  the  property.  But  no  sooner  was 
there  a  possibility  that  the  State  would  carry  out  a  bargain  so 
carefully  recorded,  than  there  was  a  great  outcry.  It  was  de¬ 
clared  tobe  very  hard  that  those  stockholders  (if  there  were  any,) 
who  purchased  property  without  investigating  the  title,  should 
suffer,  just  as  common  people  suffer,  for  their  want  of  fore¬ 
thought.  The  Legislature  were  in  some  way  persuaded  to  that 
opinion,  and  granted  for  the  benefit  of  the  shareholders  in  case 
of  a  purchase  the  sum  of  more  than  ^3,800,000  and  by  so  doing 
imposed,  whenever  this  purchase  is  made,  a  heavy  annual  tax 
on  the  business  of  the  State  forever. 

The  affair  was  manao’ed  with  the  sao-acitv  that  miorht  have 

O  0*^0 

been  expected  from  a  corporation  wealthy  enough  to  retain  the 
choicest  legal  ability  in  the  land.  The  managers  professed  to 
laugh  at  the  idea  of  a  purchase  by  the  State,  but  they  well 
knew  that  if  the  people  could  be  made  to  understand  that 
without  incurrino;  the  slio:htest  risk,  the  interest  on  the  State 
debt  could  be  paid,  freight  and  passage  money  reduced  from 
one-third  to  one-half,  and  the  road  forever  after  run  for  the 
largest  interests  of  the  public,  that  the  purchase  would  not  long 
be  delayed.  The  only  chance  of  avoiding  it  was,  to  get  the 
legislation  that  was  needed  before  the  proposition  was  under¬ 
stood  by  the  masses  of  the  people. 

Advantage  was  adroitly  taken  of  the  general  desire  for 
a  union  of  two  roads,  and  this  enormous  grant  of  nearly 
84,000,000  was  slipped  into  the  last  section  of  the  bill,  which 
like  the  postcript  of  a  lady’s  letter,  contained  the  gist  of  the 
whole  matter. 

As  far  as  I  can  learn  there  was,  for  some  good  reason,  small 
discussion  upon  this  generous  disposition  of  the  public  property. 
A  member  stated  that  some  lawyer  had  given  it  as  his  opinion 
that  the  claim  of  the  State  to  take  the  property  at  seven  per 
cent,  had  been  waived  by  subsequent  legislation.  I  asked  him 
on  what  legislation  it  was  based,  he  replied  that  he  did  not 
know,  and  that  he  never  had  seen  the  opinion.  Yet  such  was 
the  legal  authority  on  which  nearly  84,000,000  of  the  peojdes’ 
property  was  granted  by  this  Legislature. 

But  this  grant,  enormous  as  it  was,  was  not  all  the  friends 
of  the  monopoly  desired  or  hoped  for.  The  bill,  as  originally 


i  5 

reported,  contained  a  clause  that  the  Commonwealth  might 
purchase  by  “paying  therefor  a  sum  equal  to  the  amounts  ex¬ 
pended  in  construction  by  the  original  corporation  or  corpora¬ 
tions  comprising  it,  or  by  said  Boston  and  Albany  Company, 
with  a  net  profit  thereon  of  ten  per  cent,  a  year  from  the  times 
of  said  expenditure  to  the  time  of  the  purchase.”  That  is,  that 
the  shareholders  should,  in  case  of  a  purchase,  receive  not  only 
what  they  had  paid,  but  in  addition  a  sum  equal  to  the  amount 
loaned  by  the  State,  with  ten  per  cent,  interest  on  the  whole 
amount  for  thirty  years  !  If  this  could  have  been  passed  the 
State  would  have  been  put  under  bonds  of  some  Fifty  Millions 
never  to  presume  to  interfere  with  the  management  of  the 
Boston  and  Albany  Railroad. 

I  at  once  called  the  attention  of  the  public  to  this  provision 
through  the  papers,  and  the  bill  was  altered  so  as  to  conform 
to  the  provision  made  in  the  case  of  other  railroads.  Of  the 
motives  that  led  to  the  passage  of  this  act  I  have  nothing  to 
say.  We  live  in  Massachusetts,  where,  it  is  to  be  hoped,  the 
notorious  immorality  attributed  to  New  York  legislators  is 
unknown.  Had  this  bill  been  proposed  in  Albany  instead  of 
Boston,  it  would  have  put  many  thousands  of  dollars  in  the 
pockets  of  a  ring.  I  was  accused  of  having  insinuated  that 
some  members  of  the  committee  were  bribed.  This  I  deny. 
I  know  of  no  gift  other  than  that  which  the  President  allowed 
he  had  sent,  in  the  shape  of  a  free  pass  for  the  year,  to  every 
member  of  this  Railroad  Committee,  as  soon  as  he  knew  of  his 
appointment.  It  was  a  small  gift,  and  it  does  not  follow  that 
he  would  have  given  or  they  have  received  a  larger  one. 

But  there  is  a  way  of  perverting  legislation  which  cannot  be 
called  bribing,  but  may  go  under  the  more  euphonious  term  of 
influencing.  This  is  done  by  professional  lobby  members  who 
first  carefully  select  candidates  at  a  primary  meeting.  Those 
who  remember  the  exertions  which  were  made  to  secure 
the  nomination  of  members  of  the  Railroad  Committee  of 
the  last  Legislature  by  men  who  had  never  before  been  seen 
at  a  primary  meeting  will  recognize  the  importance  of  this 
preparatory  service.  As  soon  as  the  members  report  them¬ 
selves  at  the  Capital,  those  living  at  a  distance  are  provided 
with  free  passes  over  all  the  Railroads  that  have  any  thing  to 
ask.  An  experienced  lobbyist  secures  board  at  his  own  hotel 
for  those  who  remain  in  the  city,  and  by  some  remarkable 
eloquence  persuades  the  landlord  to  take  them  at  half  price. 
Here  he  has  an  opportunity  of  acting  on  them  together,  and  of 
using  every  effort  to  bring  them  in  a  solid  phalanx  upon  what¬ 
ever  side  of  a  public  question  accords  with  the  interest  of  his 
employers.  Rooms  are  provided  where  members  assemble 
in  nightly  conclave.  And  while  a  genial  feeling  spreads 


over  all,  a  skilful  manipulator  instructs  them,'  without  their 
being  conscious  of  it,  in  the  vote  that  is  to  be  given.  To 
convince  them  that  the  popular  sentiment  is  in  accordance 
with  the  wishes  of  the  lobbyist  and  his  employers,  a  number 
of  persons  are  provided  who  by  calling  one  after  another,  and 
expressing  the  same  opinion,  make  the  member  believe  that 
the  public  demands  the  measure,  that  only  a  few  interested 
applicants  desire.  The  effect  of  such  a  continued  impression 
is  shown  in  the  well-known  story  of  a  party  of  students  agree¬ 
ing  to  speak  to  one  of  their  number  of  his  pale  and  cadaverous 
appearance  until  at  length  his  imagination  sent  him  to  a  sick¬ 
bed.  I  do  not  insinuate  that  any  members  of  the  Railroad 
Committee  of  the  Legislature  were  consciously  influenced 
in  these  or  any  other  wavs.  But  for  their  interest,  as  well  as 
that  of  the  public,  I  regret  that  they  refused  to  have  printed 
the  important  evidence  that  was  given  before  them,  which  a 
skilful  stenographer  had  been  employed  to  report. 

But  it  is  useless  to  dwell  upon  the  past.  Let  us  look  rather 
to  the  future  which  is  still  Avithin  our  poAver.  Let  me  cite  a 
question  that  AAdll  be  brought  before  the  Legislature  soon  to  be 
elected.  It  can  hardly  fail  to  call  your  attention  to  the  temp¬ 
tations  to  AA’hich  manao;ers  of  our  railroads  and  members  of  our 
Legislature  are  exposed  by  the  existence  of  these  giant 
monopolies. 

On  the  25th  of  January,  1866,  the  Directors  of  the  Western 
Railroad,  made  a  report  to  their  stockholders,  Avhich  concluded 
as  folloAvs ;  “For  the  purpose  of  completing  and  equipping 
the  roads,  and,  should  opportunity  offer,  to  pay  in  advance  of 
maturity  any  of  the  indebtedness  of  the  Corporation,  leaA^e 
should  be  obtained  from  the  present  Legislature  to  increase  the 
capital  stock  to  such  an  amount  as  may  appear  reasonable.” 
This  report  Avas  signed  by  eight  Directors,  among  the  rest  by 
Mr.  Georire  A.  ShaAv,  Avho  beino-  a  member  of  the  Leo-islature, 

0^0  O' 

asked  and  obtained  leaA^e  to  introduce  a  bill  increasino;  the 
stock  to  ten  millions  of  dollars. 

Noav  AAdiat  is  meant  by  increasing  the  capital  of  a  railroad? 
It  is  simply  obtaining  from  the  Legislature  a  right  to  impose 
a  tax  on  the  business  of  the  State.  That  this  grant  Avas  made, 
as  it  only  could  be  made,  for  a  valuable  consideration  appears 
from  the  phraseology  of  the  bill.  It  provides  that  the  shares 
shall  be  “  of  one  hundred  dollars  each,”  and  “  before  anA'’  sale 
of  the  neAv  shares  authorized  to  be  created  by  this  act  ”  the 
directors  are  required  to  give  thirty  days  notice  and  then  “  the 
CommonAvealth  and  other  stockholders  may  take  at  the  par 
value  thereof  their  proportion  of  such  increased  shares,  .... 
and  if  any  shares  then  remain  unsold,  the  said  corporation  may 
dispose  of  the  same  at  not  less  than  the  par  value  thereof ^ 


hr 

/ 

That  such  was  the  understanding  of  the  directors  appears  by 
the  report  made  to  the  shareholders  on  the  second  day  of  Jan¬ 
uary,  1867,  which  was  signed  by  the  board.  In  this  it  is  stated 
that  “  This  increase  icas  ashed  for  hy  the  corporation  in  order 
to  provide  funds  for  the  completion  of  the  second  tracks  to  make 
such  addition  to  the  facilities  of  the  road  as  the  increasing 
business  should  render  necessary^  and  to  purchase  as  opportu¬ 
nity  may  offei\  any  of  the  outstanding  obligations  of  the  cor¬ 
poration.  This  act  xvas  formally  accepted  by  the  corporation.^'^ 
Had  they  stated  that  this  stock  was  to  be  used  for  a  gratuitous 
distribution  amons;  their  shareholders  the  act  authorizino;  the  in- 
crease  would  have  been  repealed  as  soon  as  a  bill  could  have 
been  reported.  The  Legislature  adjourned  on  the  thirty-first 
day  of  May,  and  on  the  fourth  of  June,  five  days  after,  these 
directors  made  a  dividend  of  two  million  of  dollars  in  stock, 
and  divided  it  among  their  shareholders  without  requiring  one 
cent  in  return.  By  this  act,  the  directors  gave  the  president, 
if  he  holds  the  amount  of  stock  popularly  attributed  to  him,  at 
least  fifty  thousand  dollars,  and  divided  among  the  shareholders 
the  balance  (at  the  market  price  of  the  stock)  of  two  million 
eight  hundred  thousand  dollars,  and  imposed  a  tax  (if  the  road 
is  not  purchased  by  the  State)  of  two  hundred  thousand  dollars, 
per  annum,  forever  upon  the  business  of  Massachusetts. 

At  the  approaching  session  this  gross  contempt  of  the  inten¬ 
tion  of  the  State,  and  of  the  interests  of  the  people  will  be  brought 
before  a  Legislature  which  has  the  power  to  “alter,  amend,  or 
repeal  the  charter  of  any  railroad,”  or  to  purchase  its  property 
and  franchise.  Now  I  do  not  mean  to  sav  what  the  manao:ers 
of  this  corporation  will  do,  or  what  Kepresentatives  may  be 
induced  to  do.  But  I  will  state  what  they  both  will  be  tempted 
to  do.  The  object  will  be  to  obtain  such  “  subsequent  legisla¬ 
tion”  as  will  endorse  the  action  of  the  board  and  confirm  this 
enormous  amount  of  money  taken  from  the  people  to  the 
directors  and  shareholders  forever.  What  can  a  corporation 
afford  to  pay  for  votes  for  such  an  endorsement?  According 
to  the  New  York  tariff  thev  would  be  Avorth  from  five  to 

4/ 

twenty  thousand  dollars  a  piece,  the  larger  sum  being  for 
the  chairman  and  influential  members  of  Kailway  Committees. 
The  managers  Avould  have  the  poAver  to  make  these  payments, 
and  a  majority  of  the  shareholders  AAmuld  be  tempted  by  pecu¬ 
niary  interest  to  sustain  them  in  so  doing.  What  is  the  temp¬ 
tation  on  the  other  side, — a  member  comes  from  the  country, 
he  has  a  mortgage  on  his  farm,  a  lobby  member  whispers  to 
him  that  if  he  Avill  vote  for  a  certain  bill,  or  only  Avithdraw  on 
a  division,  his  note  shall  be  returned  and  his  rnorto-ao’e  cancelled. 
Lest  this  be  thought  extravagant  I  quote  from  a  correspondent 
of  the  Daily  Advertiser  a  description  of  the  legislation  in  a 
neighboring  State.  I  omit  names  as'not  material  to  my  purpose. 


8 


“  In  the  New  York  Legislature  are  several  posts  of  honor,  namely :  the  speak¬ 
ership,  the  chairmanship  of  these  committees — ways  and  means,  banks,  colleges, 
judiciary.  There  are  also  places  of  emolument,  such  as  the  committees  on  rail¬ 
roads,  affairs  of  cities,  claims,  canals,  insurance  companies,  commerce  and  naviga¬ 
tion.  The  chairmen  of  these  committees  are  ‘high-priced’  men.  The  same  thing 
is  often  true  of  the  corresponding  committees  of  the  Senate,  The  money  is  made 
from  corporations  and  men  seeking  for  charters.  When  tliere  is  no  good  ‘reason’ 
for  withholding  acts  of  incorporation,  there  is  assessed  upon  it  its  share  of  black 
mail,  and  it  is  allowed  to  pass.  But  the  ‘lobby’  has  become  quite  a  secondary 
affair.  The  members  of  the  committees,  and  cliques  in  the  House  form  ‘  rings,’ 
which  will  not  suffer  bills  to  be  reported  or  passed  till  they  shall  have  been  satis¬ 
fied.  But  alas !  for  men  seeking  grants  or  charters  when  they  encroach  on  the 
field  of  a  corporation  already  existing.  The  latter  has  the  leading  members  of 
particular  committees  in  pay ;  and  then  is  accomplished  the  oracular  word  of 
‘More  money  is  made  by  killing  than  by  passing  bills.’  We  can  obtain  no  new 

railroad  grants  in  New  York,  because - , - , - ,  and - have 

the  field,  and  demand  the  lion’s  share.  These  men  control  the  Legislature,  Com¬ 
mon  Council,  Supervisors,  and  newspapers  of  New  York.  Talk  about  democracy 
— the  right  and  ability  of  the  people  to  govern  themselves — not  a  bit  of  it.  New 
York  is  an  oligarchy ;  and  her  railway  kings  are  her  lords  and  noblemen.  The  rest 
is  but  ‘  leather  and  prunella,’  jMen  go  to  the  Legislature  poor  and  return  rich. 
‘  You  ai’e  a  good  fellow,  M.,’  said  a  New  York  democrat  to  a  western  member  of 
Assembly,  ‘  but  my  expenses  in  Albany  are  large — far  greater  than  S3  per  day. 

- has  been  along,  and  now  you  understand  Avliy  I  cannot  vote  for 

your  bill.’  A  State  Senator  one  spring  invested  8120,000  in  city  bonds  in  the 
name  of  his  wife ;  another,  a  year  or  two  later,  bought  a  handsome  farm,  though 
not  greatly  ‘  forehanded  ’  till  that  time.  ‘  They  say  you  cleared  840,000  last 
winter.’  ‘  It  is  not  so  ’  was  the  reply;  I  ought  to  have  made  826,000,  but  was 
cheated  out  of  811,000  in  one  case.’  ‘  How  did  you  do  V  ‘  When  a  bill  having 
money  in  it  Avas  introduced,  I  made  my  terras  Avith  its  friends — so  much  for  report¬ 
ing  it  and  so  much  for  passing  it  through  the  House.  They  might  leave  Albany 
till  it  got  to  the  Senate;  after  that  they  must  look  out  for  it  themseh'es.  I  took 
so  much  myself,  and  gaA’e  so  much  apiece  to  certain  members  of  my  committee, 
and  they  AA^ere  generally  satisfied.’  For  ten  years  past  legislation  has  been  em¬ 
phatically  a  matter  of  traffic  and  sale.  The  result  is  that  the  people  have  become 
callous  to  it ;  those  familiar  Avith  the  evil  make  a  jest  of  it ;  and  the  faith  is  fast 
ebbing  aAA’ay  that  things  AA'ill  CA'er  be  any  better.  Republican  institutions  generally 
perish  when  the  people  lose  confidence  in  this  Avay.” 


I  pray  you  to  ponder  these  statements,  and  then  consider 
what  per  centage  it  would  be  for  the  interest  of  the  managers 
of  the  AYestern  Eailroad  to  pay  to  confirm  the  title  of  their 
shareholders  to  two  million  eight  hundred  thousand  dollars 
worth  of  stock,  Avhich  they  confess  was  authorized'only  for  the 
purchase  in  money  of  bonds  of  the  State  and  for  the  completion 
and  equipment  of  the  road.  Such  are  the  temptations  to  which 
both  parties  will  be  exposed  at  the  next  session.  Is  it  right 
for  Massachusetts  to  permit,  if  she  can  avoid  it,  the  existence 
of  temptations  which  the  sad  experience  of  other  States  shows 
there  has  not  been  virtue  enough  to  resist. 

But  is  it  said,  that  this  corporation  has  nothing  to  ask  of  the 
Legislature,  that  all  they  want  is  to  be  let  alone  ?  Then  I 
ssLY  that  no  Legislature  can  be  justified  in  not  bringing  them 
to  an  account.  The  State  entrusted  this  board  with  stock 
worth  two  million  of  dollars,  for  a  specific  purpose.  They 
divided  it  between  themselves  and  their  shareholders.  See 
how  what  has  been  done,  if  passed  over  without  notice,  will 


0 


affect  the  future.  The  two  millions  appropriated  by  the  direc¬ 
tors  were  intended  “  to  make  such  addition  to  the  facilities  of 
the  road  as  the  increasino'  business  should  render  necessary.” 
The  time  has  come  when  the  business  that  is  waitino;  to  be 
done  demands  increased  facilities.  Two  millions  would  provide 
the  most  admirable  depot  accommodations  in  the  world  on  the 
State  flats  at  South  Boston,  but  how  can  they  be  obtained  ? 
Perhaps  the  directors  may  petition  for  an  increase  of  stock  for 
this  specific  purpose.  They  may  state  over  their  own  names, 
while  the  Legislature  is  in  session,  that  their  petition  was 
granted  for  that  very  object,  and  then  five  days  after  adjourn¬ 
ment,  they  may  divide  the  spoil  among  the  shareholders,  im¬ 
pose  a  tax  forever  upon  the  people,  set  the  Legislature  at 
defiance,  and  justify  all  by  this  precedent. 

But  perhaps  some  shareholders  may  say,  “What  can  the 
Legislature  do  ?  Our  directors  whether  justified  or  not  have 
issued  twenty  thousand  shares,  propose  to  divide  a  hundred 
thousand  dollars  upon  them  next  January,  and  semi-annually 
for  ever  after,  and  will  tax  the  people  for  it.  By  transfer,  these 
new  shares  have  been  so  mixed  up  with  stock  upon  which  a 
hundred  dollars  has  been  paid  that  they  cannot  be  distin¬ 
guished,  and  the  State  has  no  remedy.  A  power  exists 
greater  than  the  Legislature  in  the  giant  monopoly  they  have 
created!”  There  is,  however,  one  way  by  which  the  people 
can  escape  from  this  unauthorized  taxation.  The  State  can 
purchase  the  road  at  the  price  authorized  by  the  last  Legisla¬ 
ture,  and  accepted  by  the  corporation.  The  directors  have 
increased  their  capital  by  a  dividend  of  stock  amounting  to 
two  millions — in  the  settlement  dividends  are  to  be  deducted, 
which  will  place  the  shareholders  precisely  where  they  were 
and  give  them  about  one  hundred  and  fifty  dollars  a  share  for 
the  stock  which  before  the  action  of  the  last  Lesfislature,  in 
case  of  a  j)urchase,  would  have  netted  them  but  ninety-seven 
dollars. 

Seeing  that  this  purchase  is  imperatively  demanded  by  the 
highest  interests  of  the  State,  patriotic  citizens  will  ask  the 
terms  on  which  it  can  now  be  made. 


The  following  statement  I  believe  to  be  essentially  correct. 

WESTERN  RAILROAD. 


Capital  stock,  Nov.  30,  1866,  -  -  -  - 

Interest  on  shares  at  10  per  cent.,  to  January,  1867, 

'I 

Deduct  dividends  and  taxes  paid  for  shareholders. 


$6,710,800 

13,064,379 


19.710,179 

9,736,690 


To  be  paid  to  shareholders  at  about  $149  per  share, - 


9.978,489 


2 


10 


Amount  brought  forward^  -  -  ^9,978,489 

Additional  property  transferred  to  State, 


Surplus,  -----  $1,267,^58 

Assets  held  by  corporation,  -  -  -  ],8(t5,972 

Sinking  fund  to  Nov.  30,  1866,  -  3,417,203 

“  “  estimated  to  Nov.  30,  1867,  250,000 


6,741,033 

Deduct  debt,  -----  5,945,020 


Balance  in  favor  of  the  State,  -  796,013 


BOSTON  &  WORCESTER  RAILROAD. 

Capital,  _  _  -  -  -  $5,000,000 

Interest  to  January  1,  1868,  -  -  12,117,000 


17,117,000 

Deduct  dividends,  &:c.,  9,033,516 


To  be  paid  to  shareholders  of  B.  &  IV.,  about  $160  a  share,  8,083,984 

To  be  paid  by  State  for  both  roads,  -  -  -  18,062,473 

Worcester  surplus  and  assets  transf ’d  to  State,  1,860,128 
Western,  “  “  “  “  796,013 

-  2,656,141 


Total  cost  to  State,  -----  $15,406,332 


The  cost  to  the  State  when  depots  and  locomotives 
are  provided  will  not  exceed  twenty  million  dollars, 
which  can  be  borrowed  on  her  credit  at  5  per  cent, 
on  gold,  or  6  per  cent,  on  currency.  According  to  the 
last  returns,  which  did  not  give  the  full  amount  of 
income,  as  many  items  were  charged  to  expense  j 

which  belonged  to  construction,  the  net  receipts  of  1 

the  Western  were,  -----  $1,406,790.71  ^ 

the  Worcester,  -  ------  490,201.00  ^ 

1,896,991.71  I 

As  in  case  of  the  purchase  the  interest  would  be  pro¬ 
vided  for,  and  no  excise  or  State  tax  be  charged  to 
the  State.  There  should  be  added  on  the  Western 
these  and  the  amount  paid  annually  to  the  sinking  fund,  506,255.55 
On  the  Worcester,  U.  S.  Tax,  ,  -  -  -  48,370.(;7 

State  Tax,  by  estimate,  -  -  -  52,OO0  00 

2,503,617.33 

Interest  at  6  per  cent,  in  currency,  -  -  -  -  l,200,000.ot) 

Leaving  a  balance  in  favor  of  the  State  of  -  -  $  1 ,303,617.33 


11 


And  this  balance  can  be  applied  to  payment  of  the  interest  on  the 
State  debt,  and  to  an  immediate  reduction  of  freights  and  fares 
on  the  line  of  the  road. 


X 


In  the  above  statement  I  have  taken  no  notice  of  the  stock 
)  dividend  of  two  millions  of  dollars — as  I  have  before  said, 

'  if  it  is  added  on  the  one  side  as  stock  it  will  be  deducted 
on  the  other  as  a  dividend,  and  have  no  other  effect  than  to 
reduce  the  shares  from  $150.23,  to  $115.74.  It  in  fact  gives 
a  bonus  or  discount  of  two  millions  of  dollars  to  the  State 
whenever  she  makes  the  purchase. 

Should  the  Legislature  confirm  the  last  issue,  the  year’s 
profit  will  be — 

Legislative  grant  of  difference  between  7  and  10 

per  cent.  -------  $3,836,328 

Directors’  gift  at  market  price  of  $140,  -  -  2,800,000 


$6,636,328 


I  Giving  an  increase  of  the  value  of  the  corporations  property,  in 
!  one  year  of  more  than  Six  million  six  hundred  thousand 
DOLLARS,  for  which  it  has  not  paid  one  cent — but  upon 
;  which  the  people  may  be  called  upon  to  pay  interest  forever! 
i  The  State  can  easily  obtain  money  to  make  this  purchase. 

A  good  name  is  rather  to  be  chosen  (on  the  exchange) 

I  than  great  riches.  And  how  does  the  Bay  State  stand? 
1  While  the  other  States  paid  their  interest  in  green-backs, — 
3Iassachusetts  paid  in  gold  I  They  kept  the  word  of  promise 
to  the  ear,  but  broke  it  to  the  hope.  Massachusetts  kept  her 
faith  both  in  the  letter  and  the  spirit.  Her  promise,  based  on 
I  a  property  paying  at  the  present  time  more  than  double  the 
amount  of  the  interest,  and  constantly  increasing  in  value,  will 
be  the  best  security  in  the  world,  and  her  five  per  cents  will 
I  command  a  premium  both  in  Europe  and  America.  A  sink¬ 
ing  fund  will  pay  the  whole  debt  in  twenty-five  years,  and 
leave  the  property  unincumbered  to  the  State, 
j  But  is  it  said  that  Pennsylvania  sold  out  her  public  works 
i  to  joint  stock  companies?  I  ask  you  to  look  at  the  result! 
The  Pittsburgh  and  other  Pennsylvania  papers  of  the  last  year 
were  full  of  earnest  complaints,  it  was  openly  said  that  all 
internal  improvements  were  stopped  that  could  by  possibility 
interfere  with  the  interests  of  the  Pennsvlvania  Central, — that 
a  majority  of  the  Legislature  were  openly  bribed,  and  were 
merely  used  to  register  the  decrees  of  a  corporation, — that  in 
'  short  for  all  practical  purposes  of  internal  improvement,  the 
j  president  of  the  railroad  was  the  autocrat  of  the  State.  Let 
us  beware  how  we  permit  such  an  overgrown  power  to  exist 
in  Massachusetts. 


12 


As  Illustrating  a  clIiFerent  policy,  look  at  the  working  of  the 
Xew  York  Canal.  DeWitt  Clinton  and  his  compeers  asked 
only,  how  can  the  State  and  the  people  be  most  benefited? 
They  never  thought  of  personal  speculation  but  only  how  they 
could  accomplish  the  greatest  good  to  the  public.  The 
revenues  of  the  canal  have  paid  the  interest  on  its  cost,  the  i 
losses  sustained  by  the  State  on  bankrupt  railroads,  and  the  | 
principal  down  to  the  balance  of  fifteen  millions  of  dollars.  ’ 
Besides  this  it  is  estimated  from  data  obtained  in  1852,  that 
these  canals,  as  compared  with  railroads  as  then  and  now 
managed,  saved  by  cheaper  transportation  at  least  twelve 
millions  of  dollars  a  year  to  the  people.  These  canals  and 
their  management  have  been  decried  by  corporations  and  their 
tools,  but  thev  stand  and  will  forever  stand  a  monument  to  the 
wisdom  and  patriotism  of  the  men  who  devised  them,  and  of 
the  system  which  they  established.  Twenty  years  ago  to 
prevent  their  being  purchased,  like  the-  public  works  of  Penn¬ 
sylvania,  by  covetous  speculators  and  venal  Legislators,  New 
York  put  the  provision  in  her  Constitution  that  “the  canals  of 
the  State  should  never  be  leased  or  sold,  but  should  remain 
the  property  of  the  State  and  under  its  management  forever.” 
What  is  the  result  ?  While  corporators  and  railway  man-  j  ' 
agers  are  irritating  the  people  by  impositions,  producers  and 
consumers  are  merely  sorry  that  the  canals  freeze  up,  and 
a  little  impatient  that  freights  that  travel  so  well  can  travel  no 
faster. 

I  advocate  the  purchase  of  the  Albany  and  Boston  Railway 
by  the  State  for  many  reasons.  The  comparison  I  have  made 
between  the  Pennsylvania  Central,  and  1  might  add  all  other 
trunk  roads,  and  the  Erie  Canal,  show  that  the  State  can 
manage  them  for  the  interests  of  the  people  far  better  than  j 
private  corporations.  Had  the  Erie  Canal  been  sold  to  a  cor¬ 
poration,  who  would  have  owned  the  boats,  and  made  a  charge 
for  every  article  they  carried,  does  any  one  suppose  that  the 
public  would  have  been  as  well  and  as  cheaply  served  as  at 
present.  Is  it  said  that  cars  are  different  from  boats,  and  that 
it  would  be  impossible,  even  if  under  the  entire  control  of  the 
managers,  to  have  those  owned  by  Individuals  run  safely  on 
the  roads?  To  whom  then  do  the  Express  and  Red  Line  and 
Blue  Line  and  White  Line  of  cars  belong?  When  managers 
have  an  interest  in  the  immense  profits  made  by  them,  there  is 
no  difficulty  and  no  danger.  Let  the  public  be  placed  where 
such  directors  are,  and  no  insurmountable  difficulty  will  be 
experienced.  From  the  nature  of  things,  the  interests  of  the  ) 
shareholders  and  of  the  public  can  never  be  identical.  It 
shareholders  can  earn  ten  per  cent.,,  directors  will  not  trouble  3 
themselves  to  reduce  fare  for  the  benefit  of  the  people,  but  will  " 


rather  strive  to  see  how  by  becoming  part  owners  in  pet  lines 
of  express  and  private  cars  they  can  put  into  their  own  pockets 
what  under  the  true  system  should  belong  to  the  public.  The 
right  of  putting  on  cars  by  private  individuals,  would,  under 
the  present  system,  amount  to  nothing,  as  those  belonging  to 
j individuals  or  companies  who  shared  with  the  managers  would 
go  through  regularly,  and  those  owned  by  men  not  belonging 
fto  the  rins:  would  be  detained  or  left  behind. 

What  mio:ht  be  the  advantag-e  of  Government  management 
of  railways,  is  shown  not  only  in  the  canal  system  of  New 
York,  but  even  more  strikingly  in  the  post-office  arrangements 
of  England  and  this  country.  The  post-office  conveys  our 
letters  on  one  system  by  Government  management,  the  rail¬ 
way  companies  our  persons  and  our  property  on  one  totally 
different.  The  first  is  conducted  primarily  for  the  public  good, 
and  incidentally  for  profit.  The  second  exclusively  for  the 
benefit  of  the  managers  and  stockholders  in  the  corporations. 
By  the  one  I  can  send  a  book  from  here  to  San  Francisco  for 

four  cents.  Bv  the  other  I  cannot  send  the  same  from  here 

•/ 

to  New  York  for  less  than  fifty.  If  I  am  dissatisfied  in  the 
one  case  I  can  fvpply  to  a  man  whose  interest  it  is  to  see  every 
abuse  at  once  corrected.  In  the  other,  at  best,  I  am  sent  from 
one  employe  to  another,  until  trouble  and  vexation  make  me 
submit  to  imposition. 

The  telegraph  system  in  Switzerland  is  full  of  suggestions 
on  this  kindred  subject. 

That  country  is  covered  with  a  network  of  telegraph  wires, 
and  the  whole  is  under  the  control  of  the  Federal  Government. 
The  charge  is  twenty  cents  for  twenty  words,  forty  for  fifty, 
sixty  for  one  hundred,  and  the  government  has  resolved  after 
the  first  of  January,  1868,  to  reduce  the  charges  fifty  per  cent., 
when  a  dispatch  can  be  sent  to  any  part  of  the  country  for 
half  a  cent  a  word.  Let  our  merchants  who  would  pay  five 
dollars  and  five  cents  for  sending  a  hundred  words  to  Wash¬ 
ington,  meditate  on  the  difference  between  the  government 
management  in  Switzerland,  and  our  private  monopolies. 

We  do  not  yet  realize  the  vast  capacity  of  the  railroad  for 
the  transportation  of  freight.  Up  to  the  present  time  the 
speed  that  can  be  attained  has  attracted  almost  exclusive  atten¬ 
tion — and  the  transportation  of  goods,  which  should  have  been 
the  first  interest,  has  been  of  secondarv  consideration.  The 
public  will  one  day  demand  the  construction  of  roads  devoted 
exclusively  to  freight.  The  amount  of  business  that  could  be 
done  on  such  roads  under  the  direction  of  the  State,  and  with 
ample  depots  at  its  termini,  is  almost  incalculable.  There  are 
at  present  bills  before  Congress  which,  if  passed,  will  revolu¬ 
tionize  the  trade,  and  bind  together  in  indissoluble  bonds  of 


14 


interest  the  several  sections  of  the  Union.  Their  object  is  to 
have  railways  constructed  by  the  United  States  which  should 
be  traversed  at  a  regular  and  comparatively  slow  rate  of  speed, 
and  be  open  to  free  competition  “  for  all  persons,  companies,  or 
corporations  who  may  desire  to  put  passenger,  freight,  or  mail 
trains  thereon,  being  subject  to  such  regulations,  and  liable  to 
such  tolls  as  Congress  may  establish.”  The  calculations  as  to 
the  results  are  thus  stated  in  a  letter  from  Governor  Pierpoint, 
of  Virginia ; — 


“  It  is  estimated  that  the  Erie  Canal,  worked  day  and  night,  has  only  a  tonnage 
capacity  of  8,000,000  tons  for  seven  and  a  half  months  of  the  year,  being  frozen 
the  residue,  that  is  four  million  each  way,  and  this  is  based  upon  an  assumption 
that  each  boat  shall  be  moved  one  mile  and  a  half  per  hour.  This  is  a  liberal 
calculation  in  favor  of  the  canal.  The  New  York  Central  Railroad  last  year  car¬ 
ried  1,602,197  tons;  the  Pennsylvania  Central  and  branches  carried  3,452,718 
tons  ;  the  Baltimore  and  Ohio  about  2,000,000  tons.  A  railroad  constructed  with 
double  track  and  equal  rate  of  speed  for  all  trains,  has  the  following  capacity : — 
Railway,  eight  miles  per  hour  and  two  miles  space  between  trains,  7,008,000  each 
Avay ;  total  tonnage  capacity,  14,016,000.  Railway,  ten  miles  per  hour,  space  tAA'o 
miles  between  trains,  8,760,000  tons  each  way  ;  total  tonnage  capacity.  17,520,000. 
Raihvay,  ten  miles  per  hour,  space  one  mile  between  trains,  17,520,000  tons  each 
way ;  total  tonnage  capacity,  35,040,000.  Railway,  eight  miles  per  hour,  space  one 
mile  between  trains,  14,016,000  tons  each  way ;  total  tonnage  capacity,  28,032,000. 
Railway,  eight  miles  per  hour,  space  half  a  mile‘between  trains,  28,032,000  tons  each 
way  ;  total  tonnage  capacity,  56,064,000,  Railway,  ten  miles  per  hour,  space  half 
a  mile  between  trains,  35,040,000  tons  each  way,  total  tonnage  capacity,  70,080,000. 
It  is  not  difficult  to  perceive  that  on  a  rate  of  eight  miles  per  hoiir,  the  speed  at 
which  lateral  friction  nearly  ceases,  a  freight  capacity  four  times  that  of  the  Erie 
Canal  can  be  achieved  with  entire  success.  It  only  remains  to  take  care  of  the 
economic  arrangements  in  combination  to  accomplish  the  reduction  of  freights  in 
an  inv  erse  ratio  someAvhat  corresponding  to  the  increased  capacity  of  the  road. 
This  data  is  given  by  scientific  men  Avho  have  paid  great  attention  to  the  subject.” 


In  conclusion  I  need  hardly  say  that  I  am  conscious  of  no 
personal  feeling  towards  the  Directors  of  the  Western  Railroad, 
or  to  the  Leo-islators  who  were  induced  to  favor  them  at  the 
expense  of  the  public.  I  could  have  wished  that  the  necessity 
of  makins:  statements  to  their  disadvantao;e  was  not  connected 
with  the  dutv  I  owe  to  mv  native  State  and  Citv,  and 
incidentally  to  the  larger  community  with  which  these  are 
connected.  But  circumstances  have  compelled  me  to  make 
the  fullest  statement  of  a  truth  that  li^reafter  it  will  seem 
incredible  any  one  could  have  doubted.  By  placing  the  road 
bed  of  the  Boston  and  Albanv  Railroad  under  the  direction  of 
the  State,  by  providing  power  and  ample  depot  accommodation 
upon  the  State  flats  at  South  Boston,  by  laying  down  a  third 
track  exclusively  for  down  freight,  and  then  inviting  the  same 
competition  that  exists  upon  the  Eric  Canal,  the  business  that 
has  left  our  metropolis  would  return,  and  Massachusetts  would 
command  material  resources  worthy  of  her  character  and 
position.  But  a  local  business  prosperity  is  the  smallest  part 
of  the  real  advantao-e  of  the  o-reat  railroad  reform  wliich 


15 


I  trust  we  shall  here  commence.  We  shall  remove  from  a 
large  class  of  shrewd  and  enterprising  men  throughout  the 
nation,  temptations  which  they  have  been  unable  to  resist. 
We  shall'  give  the  poor  man  comforts  which  he  cannot  at 
present  command.  By  reducing  the  necessary  expenses  of 
living,  we  shall  give  intellect  the  priceless  gift  of  time  for  its 
cultivation  and  development,  and  promote  that  domestic  life 
upon  which  the  true  success  of  a  nation  depends.  To  accom¬ 
plish  this,  there  is  only  needed  that  public  spirit  once  charac¬ 
teristic  of  the  merchants  of  Boston  and  the  yeomen  of  the  State. 
There  is  only  needed  that  sentiment  of  public  duty  which  leads 
men  to  recognize  the  collective  interest  of  the  many  as  superior 
to  the  interest  of  a  few,  and  to  be  worth  some  sacrifice  of 
individual  taste.  We  must  contend  for  a  time  against  a  cor- 
poration  wielding  all  the  influence  that  great  wealth  can  give, 
and  able  to  command  all  the  talent  that  money  can  secure. 
But  if  the  old  spirit  of  disinterested  23atriotism  exists  among 
us  the  issue  is  certain. 

To  that  spirit  I  make  this  appeal. 


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